Tuesday, April 19, 2016

Sharkey Bites Malloy

When the General Assembly, dominated by members of his own
party, returned to Governor Dannel Malloy a revised budget that was $340
million out of balance, he did his duty. Mr. Malloy resubmitted to the
legislature a second balanced budget that contained further spending
reductions, no tax increases and no raids on rainy day funds.

In an April 16 op-ed in a Hartford paper,
Mr. Malloy noted pointedly that there were only three weeks left in the
legislatives session and the legislature had not yet resolved a $900 million
budget shortfall for the coming fiscal year. Mr. Malloy had determined that
state government could not “respond to this challenge in the same way we have
in the past, that we must change business as usual at the Capitol.” This was a
late realization. During Mr. Malloy’s entire term in office, state government –
including the governor’s office – virtually a one-party operation, had been
waiting for Godot.

In the good old days, during past recession recoveries, a
rising tide had slowly lifted Connecticut’s economic boats. During the latest
recovery period, the high tide by-passed Connecticut, which has yet to recover the
total jobs lost during the Obama recession. Business entities in a state
hammered by two Malloy tax increases, the largest and the second largest in
state history, were not returning sufficient revenue to state coffers. Other
businesses were moving out of state, further depleting state revenues. While
expenditures had grown over the years, revenues had diminished.

Connecticut’s state treasury had for decades depended
heavily on its financial sector, but it was precisely that sector that was hard
hit by a lingering recession; attempts to remediate the problem only worsened
it. A garroted economy was crying out for tax reduction and regulatory relief,
and the national government, under the autocratic presidential leadership of
quasi-socialist President Barack Obama, was piling up business costs and
regulations. Here in Connecticut, business organizations were sending to the
Malloy administration desperate, unambiguous messages: cut spending, reduce
regulations, change the arc of politics in Connecticut and try, as best you
can, to rein in the state’s fourth branch of government, state employee unions.

Mr. Malloy sprinkled some sugar on his tough medicine: "I
know that I have been asking a lot of the legislature, and I know I haven't
always asked in the gentlest way. But we all need to finish what we started
five years ago when we set off down this less-traveled path. Structural reform,
living within our means, new economic reality, call it what you like. Making it
happen is within reach now."

In a fit of near apoplexy, Speaker of the House characterized
Mr. Malloy’s op-ed “a public enemies list" and “a personal hit list,”
after which he cancelled a meeting with the Governor. Recovering somewhat from
his snit, Mr. Sharkey explained: “Hospitals, smaller towns, property tax
reform, and critical social services are all dramatically slashed under the
governor’s plan, all while insisting he be granted broad block grant
authority to unilaterally cut further without any public scrutiny or
legislative oversight. His proposal isn’t feasible, would never
get enough votes from either side of the aisle to pass,
and it offers no real basis for productive negotiations."

Mr. Sharkey promised to send yet another redrafted budget
Mr. Malloy’s way after revenue figures have been reported at the end of April.
The General Assembly’s constitutional adjournment deadline is midnight, May 4.
The state’s revenue bucket is bleeding out, the Governor’s own party cannot
bring itself to accept the “new reality” upon which Mr. Malloy’s efforts are
based – i.e. “business as usual” is no longer an option – and it is pushing
budget negotiations to the last minute, so that business as usual can be
bum-rushed through a Democrat dominated legislature that has been for the last
half century a captive of union interests.

There is but one person in Connecticut who can at this late
hour save the state from penury and a possible future bankruptcy – Governor
Malloy. He can do it by promising to veto any budget that contains tax
increases, just as his political forbearer, Governor Lowell Weicker, three times
vetoed a non-income tax budget sent to him by a legislature that had rebuffed
his income tax proposal. Secondly, Mr. Malloy can signal to state unions –
before any contract negotiations have occurred – that there are but three
branches of state government, and SEBAC, the union leadership authorized to
bargain with the Governor on union contracts, is not one of them. The “new
reality” pressing upon all our necks with its hobnailed boots forces us to
acknowledge that tails should not wag dogs. The Governor and the leadership of
the General Assembly, both Republican and Democrat, are constitutionally
charged with adopting policies that advance the public good, which should never
take a back seat to special interests.

Rarely in Connecticut’s long history has a majority in the
state’s General Assembly fiddled so irresponsibly while Rome burned.